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Dangote Refinery may have recorded its first casualty as Grangemouth, Scotland’s only refinery, is to shut down in 2025 with the loss of 400 jobs, as competition tightens.
The refinery’s operator, Petroineos, said the refinery was increasingly unable to compete with bigger, more modern and efficient plants in the Middle East, Asia and Africa.
Petroineos added that the 100-year-old plant will be turned into a fuel import terminal.
Quoting the company’s spokesman, Reuters reported that production will cease in the second quarter of next year, subject to an employee consultation.
Petroineos is a joint venture between PetroChina International London (PCIL) and INEOS Group, a British chemicals firm founded by billionaire Sir Jim Ratcliffe.
The company cited economic difficulties as the reason for the closure, stating that the company had invested $1.2 billion since 2011, and returned losses above $775 million over the same period.
“Grangemouth is increasingly unable to compete with bigger, more modern and efficient sites in the Middle East, Asia and Africa. Due to its size and configuration, Grangemouth incurs high levels of capital expenditure each year just to maintain its licence to operate,” Reuters quoted the company as saying.
It said the plant is currently losing around $500,000 per day, and expects to see a $200 million loss for 2024.
Chief Executive of Petroineos Refining, Frank Demay, added: “With a ban on new petrol and diesel cars due to come into force within the next decade, we foresee that the market for those fuels will shrink further.”
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